WhatsApp finally gets its buyout netting a cool $19 billion

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Date: Friday, February 21st, 2014, 14:26
Category: Announcement, Apps, Business, Mobile, Services, Social, Software

facebook-whatsappLast Spring, rumors were in the air that Google might be buying up the messaging app WhatsApp, the iMessage-like online texting service, but the sale never happened. Honestly, I had forgotten that the Google acquisition didn’t happen, so I was really surprised when Facebook announced it was snapping it up. Yes, that number is correct, $19 billion. Who knew they had that much lying around? Ok, it wasn’t a straight up $19 bil, it was $4 billion in cash, $12 billion in shares, and $3 billion in restricted stock for the founders and employees that’ll divest over the next 4 years. Pretty good take overall.

Perhaps you’re asking though, why does Facebook need another messaging app when it has Facebook Messenger? For one, if you can believe it, not everyone is on Facebook. Whaaaa?! So Facebook hopes to get that demographic under its wing. More importantly, however, is that they will grab huge overseas user base. When doing a quick poll of my friends about whether they use WhatsApp, I usually got one of two answers. Either, “What is WhatsApp?” or “Yeah, I use it to text my family and friends in Hong Kong/Singapore/Netherlands/London” to name a few. Outside of the US, it would appear that most people have to pay for every text message. So really, this is about grabbing marketshare outside of the US.

What does this mean for current users? According to the WhatApp Blog, pretty much nothing;

“WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.”

Whether that “nominal fee” continues is a big question. WhatsApp’s fee for keeping the experience ad-free has been $0.99 per year, however, with Facebook behind the wheel, there is concern that the potential reach of WhatsApp gives them incentive to pepper the experience with ads as it does with the Facebook online experience. Time will tell what will happen with the messaging service, and its other adopted sibling Instagram, and whether they remain as stand-alone services or eventually have their features folded into Facebook itself. Not using either app very much, I (and possibly many others drifting away from Instagram) probably won’t notice.



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